Pipeline IPO in the Works
Analysts have recently been talking about the possibility of a pipeline IPO. According to the news outlets, Marathon may be directly involved in the whole plan. Let’s find out some of the important details from Nima Baiati.
On Wednesday (February 1) Marathon Petroleum Corp. (MPC), the unit that was spun off from Marathon Oil Corp. (MRO), announced that it may itself spin off its pipeline and logistical assets sometime in the second half of 2012. The company, which consists of the downstream operations of Marathon Oil Corp., is under increasing pressure to increase shareholder value, namely by New York-based hedge fund Jana Partners LLC, who currently hold a 5.5% stake in MPC.
Marathon Petroleum Corp. was spun off from the Marathon Oil Corp. last July, taking with it downstream operations. Marathon Oil Corp. maintained all upstream operations in the separation of the two entities. MPC currently operates six refineries in the United States along with roughly 9,600 miles of pipelines and logistical equipment. The company currently has the capacity to refine approximately 1.2 million barrels of crude oil per day. Additionally, it also has a distribution network of a little more than 5,000 outlets (independently owned) in 18 states. Obviously all of this requires an extensive logistical network. It is the 9,600 miles of pipeline and the logistical assets which are under consideration for a separate spin-off into a Master Limited Partnership.
Seems as though they have a lot of planning and organizing to do before this idea is up and running. If they are willing to put in the work to get there, this could be a great idea for Marathon to make big steps forward.
Quotes taken from report by Nima Baiata, Read the entire article here.
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